Tag: 10-Q

CEOs Start to Place Big Bets as Pandemic Grinds On

Plenty of CEOs remain stuck working from home and boards may still be meeting virtually, but companies are shifting their sights from surviving the coronavirus pandemic to charting new courses through it.

Verizon Communications Inc. is jumping into the low end of the wireless market. Clorox Co. directors picked their next leader. A railroad set a new profit goal for the year. New owners are taking Neiman Marcus out of bankruptcy.

That attitude is a change from earlier in the year, when most U.S. companies spent the first months of the pandemic hunkering down, slashing costs, hoarding cash and pulling their financial forecasts. As the coronavirus’s spread continues in the U.S. and abroad, businesses have concluded they’ll coexist with it for some time. So they are reviving stalled operational plans, changing leaders and reissuing financial targets.

Covid-19: The Impact on Guidance, Buybacks and Dividends in the S&P 1500

Covid-19 has led to widespread changes to financial guidance, buyback programs and dividend payments across the whole of the US equity market, although notable differences exist between different market-cap segments, according to new research.

IR Magazine has worked with MyLogIQ, a provider of intelligence tools focused on compliance and disclosure, to understand how companies on the S&P Composite 1500 Index have responded to disruption caused by the pandemic.

To gather the data, MyLogIQ analyzed SEC filings of companies included in the S&P 1500, which accounts for around 90 percent of US market capitalization, between March 1 and June 12. The firm used its AI-based platform to search for concepts such as ‘withdrawing guidance’, ‘dividend suspension’ and ‘share-buyback pause’.

According to the analysis, 39 percent of S&P 1500 companies withdrew financial guidance during this period. Looking at the main market-cap segments of the S&P 1500, guidance was withdrawn by 47 percent of companies on the S&P 500, 35 percent of the S&P MidCap 400 Index and 34 percent of the S&P SmallCap 600 Index.

Pandemic Response by the Numbers

According to a review of SEC filings by S&P 500 companies by MyLogIQ, as of May 11:

  • 273 S&P 500 companies have switched to virtual meetings
  • 146 S&P 500 companies have suspended share buybacks
  • 50 S&P 500 companies have suspended or cut dividends
  • 37 S&P 500 companies have instituted job freezes
  • 91 S&P 500 companies have cut executive compensation
  • 60 S&P 500 companies have added paid sick leave or more employee benefits
  • 231 S&P 500 companies have suspended guidance
  • 72 S&P 500 companies have instituted worker furloughs or layoffs

Here are a few examples of the types of disclosures companies are making on their pandemic response.

Pandemic Response by the Numbers

According to a review of SEC filings by S&P 500 companies by MyLogIQ, as of May 4:

  • 264 S&P 500 companies have switched to virtual meetings
  • 113 S&P 500 companies have suspended share buybacks
  • 42 S&P 500 companies have suspended or cut dividends
  • 28 S&P 500 companies have instituted job freezes
  • 83 S&P 500 companies have cut executive compensation
  • 50 S&P 500 companies have added paid sick leave or more employee benefits
  • 200 S&P 500 companies have suspended guidance
  • 57 S&P 500 companies have instituted worker furloughs or layoffs

 

Here are a few examples of the types of disclosures companies are making on their pandemic response

Pandemic Response by the Numbers

According to a review of SEC filings by S&P 500 companies by MyLogIQ, as of April 14:

  • 65 S&P 500 companies have switched to virtual meetings
  • 43 S&P 500 companies have suspended share buybacks
  • 16 S&P 500 companies have suspended dividends
  • 13 S&P 500 companies have instituted job freezes
  • 47 S&P 500 companies have cut executive compensation (base salaries)
  • 15 S&P 500 companies have added paid sick leave or more employee benefits
  • 112 S&P 500 companies have suspended guidance
  • 18 S&P 500 companies have instituted worker furloughs.

How Coronavirus Spread Through Corporate America

With the first quarter in the books, big companies are preparing to disclose to investors early indications of the economic toll of the coronavirus pandemic. The respiratory illness has shut down many parts of the U.S. economy, spurring a wave of layoffs and furloughs that resulted in a record 17 million unemployment claims in a span of three weeks. It also set off a scramble by companies to conserve cash.

The Wall Street Journal, with help from data tracker MyLogIQ, analyzed public filings for companies in the S&P Composite 1500 Index—which covers about 90% of U.S. market capitalization—to assess the impact thus far. Among the findings: Almost 300 companies withdrew their financial guidance. About 175 companies suspended stock buybacks or cut their dividend. One hundred firms that together employ some three million people said they would furlough workers.

FORECAST PROFIT

Hundreds of companies in the S&P 1500 withdrew their previously issued full-year guidance, citing Covid-19 as the catalyst. Airlines were among the first, though retailers now account for about a quarter of the 295 companies that pulled their profit or sales forecasts as of April 10.

Pandemic Response by the Numbers

According to a review of SEC filings by S&P 500 companies by MyLogIQ, as of April 7:

  • 55 S&P 500 companies have switched to virtual meetings
  • 39 S&P 500 companies have suspended share buybacks
  • 16 S&P 500 companies have suspended dividends
  • 10 S&P 500 companies have instituted job freezes
  • 28 S&P 500 companies have cut executive compensation (base salaries)
  • 12 S&P 500 companies have added paid sick leave or more employee benefits
  • 99 S&P 500 companies have suspended guidance
  • 11 S&P 500 companies have instituted worker furloughs.

Pandemic Response by the Numbers

According to a review of SEC filings by Fortune 100 companies by MyLogIQ, as of March 30:

  • 36 F100 companies have switched or plan to switch to virtual shareholder meetings
  • 11 F100 companies have suspended share buybacks
  • 4 F100 companies have instituted job freezes
  • 5 F100 companies have cut executive compensation (base salaries)
  • 6 F100 companies have added paid sick leave or more employee benefits
  • 5 F100 companies have suspended dividends
  • 7 F100 companies that have suspended guidance.